Stock Market & Financial Investment News

Pentagon to pay 4% less for Lockheed's F-35 fighters, Reuters reportsThe Pentagon will pay about $107M for each F-35 it contracts as part of a $3.8B agreement with Lockheed Martin (LMT) it is set to sign Friday, according to a Reuters report that cites sources. The Air Force paid $111.6M, or about 4% more than the Pentagon, per F-35 in a previous contract with Lockheed, and the Defense Department is said to be negotiating a separated contract with Pratt & Whitney, a unit of United Technologies (UTX), for jets to power the planes. Reference Link

United Technologies July weekly volatility increases into Q2 and outlookUnited Technologies July weekly call option implied volatility is at 25, August is at 14, September is at 17; compared to its 52-week range of 12 to 26, suggesting large near term price movement into the expected release of Q2 results on July 21.

United Technologies technical notes ahead of earningsThe stock has been in a downtrend since hitting the 52-week high at $124.45 back in February. Weaker than expected earnings or outlook could keep the downtrend intact. In that event next support based on the current price of $109.98 would be at $107.95 which was a recent pivot low. A further break could see the following support levels become additional downside objectives: $104.86, $100.69, and $97.30 which is the 52-week low. If the news is a bullish surprise, the first important resistance level would be at the $113 area. A move above that level would break the existing downtrend. Additional resistance levels to watch as potential upside objectives would be at $115, $117.03, and $119.07.

On The Fly: Top stock stories at middayStocks on Wall Street were slightly higher at midday in the first trading day of a week that will be light on domestic economic data but heavy on earnings reports. Investors will be receiving profit reports from about 25% of the companies on the S&P 500 this week, making this the highest volume earnings week of this season. ECONOMIC EVENTS: In the U.S., no major data was released. In Europe, Greece reopened its banks three weeks after closing as the country worked out another bailout agreement. The country announced it has started the process of paying off its creditors, including the European Central Bank and the International Monetary Fund, with a bridge loan it just received. COMPANY NEWS: Lockheed Martin (LMT) agreed to buy the Sikorsky Aircraft business from United Technologies (UTX) for $9B, noting the price is "effectively reduced" to $7.1B after taking into account tax benefits resulting from the transaction. Shares of Lockheed, which also reported better than expected second quarter results and increased its fiscal year guidance, gained nearly 2% after the Sikorsky announcement and saying it will conduct a strategic review of its government IT infrastructure services business and technical services business... Shares of Morgan Stanley (MS) shares were little changed near noon after the bank reported earnings and revenue, excluding certain adjustments, that topped analysts' consensus forecasts... SunEdison (SUNE) announced a deal to acquire Vivint Solar (VSLR) for approximately $2.2B, payable in a combination of cash, shares of SunEdison common stock and SunEdison convertible notes. In connection with the proposed acquisition of Vivint Solar, SunEdison has entered into a definitive purchase agreement with a subsidiary of TerraForm Power (TERP) which, concurrently with the completion of SunEdison's acquisition of Vivint, will acquire Vivint Solar's rooftop solar portfolio, consisting of 523 MW expected to be installed by year-end 2015, for $922M in cash. Shares of Vivint rose 44% following the announcement, while SunEdison's stock gained 4% and TerraForm dropped 3%. Fellow residential solar installer SolarCity (SCTY), which is backed by Tesla's (TSLA) Elon Musk, rose 7% following the deal in the space. MAJOR MOVERS: Among the notable gainers was Exelixis (EXEL), which rallied 43% after the company reported that a study of cabozantinib in metastatic renal cell carcinoma met its primary endpoint of significant improvement in progression-free survival. The shares were indicated to rise even more in early pre-market trading, but lost some of their gains after Bristol-Myers (BMY) announced that its Opdivo study was stopped early after showing superior overall survival in a Phase 3 study of previously treated patients with advanced or metastatic renal cell carcinoma. Bristol-Myers rose a bit less than 1% to trade near $70 per share after its own announcement. Also higher was PayPal (PYPL), which gained more than 5.5% in its first day of trading after being spun out of eBay (EBAY). Meanwhile, eBay shares rose over 2%. Cal-Maine Foods (CALM) dropped 8% after posting lower than expected sales and profits in its fourth quarter and warning that while it should have an adequate supply of its primary feed ingredients, the company expects that prices will be "volatile" in the year ahead. Also lower were shares of several gold miners, including Barrick Gold (ABX) and Newmont Mining (NEM), which each fell about 11%, as gold prices declined about 2% near midday. INDEXES: Near midday, the Dow was up 31.66, or 0.18%, to 18,118.11, the Nasdaq was up 9.81, or 0.19%, to 5,219.96, and the S&P 500 was up 2.82, or 0.13%, to 2,129.46.

Lockheed Martin to acquire Sikorsky Aircraft business for $9BUnited Technologies (UTX) announced that it has reached an agreement to sell its Sikorsky Aircraft business to Lockheed Martin (LMT) for $9B in cash. The transaction, which is subject to regulatory approvals and customary closing conditions and adjustments, is projected to close by year-end or in the Q1 of FY16. Proceeds from the sale are expected to be used to fund additional share repurchase to offset the earnings impact related to the sale. The company will discuss this transaction at its previously scheduled conference call with investors. In addition, UTC's Board of Directors has authorized a share repurchase program for up to 75M shares of the company's common stock, which would be worth approximately $8.3B based on the NYSE closing price of UTC shares on July 17. The new authorization replaces a previous program, approved in February 2013, which was nearing completion. The precise timing and amount of repurchases will be determined based on the company's evaluation of market conditions and other factors, and the program may be suspended or discontinued at any time.

Lockheed Martin to conduct strategic review of govt IT infrastructure businessOn July 20, 2015, Lockheed Martin also announced that it will conduct a strategic review of the government IT infrastructure services business within its IS&GS business segment and the technical services business within its MFC business segment. The programs to be reviewed represent approximately $6B in estimated 2015 annual sales and approximately 17,000 employees. The Lockheed Martin expects the strategic review will result in a spin-off to its shareholders or sale of these businesses. The IS&GS programs that are not included in the strategic review are mostly focused on defense and intelligence customers and will be realigned into the Lockheed Martin's other business segments following completion of the review. The Corporation expects to complete the strategic review in 2015. While the Lockheed Martin performs its strategic review, it will maintain the current operating and reporting structure and will continue to report the financial results of the government IT infrastructure services and technical services businesses in its continuing operations.

Media reports say Lockheed to buy UTX's SikorskyAccording to media reports, Lockheed Martin (LMT) has agreed to purchase United Technologies' (UTX) Sikorsky unit. The news comes after several months of speculation surrounding Sikorsky, and an announcement could be made just a day prior to second quarter earnings for both United and Lockheed. WHAT'S NEW: Reuters reported on Sunday that Lockheed Martin has agreed to buy Sikorsky Aircraft from United Technologies for over $8B, according to two sources, adding that the deal is set to be formally announced on Monday. The news was later echoed by Bloomberg, citing a person familiar with the talks. WHAT'S NOTABLE: United Technologies first reported that it was exploring strategic options for its Sikorsky unit on March 11. At the time, the company noted that options included a spinoff or a stand-alone public company, saying that the split could allow United "to better focus on providing high-technology systems and services to the aerospace and building industries." Following the announcement, UBS remarked that it was "not surprised" and reiterated a $136 price target on United shares. On May 20, the Wall Street Journal quoted sources as saying Boeing (BA), Airbus (EADSY) and Lockheed submitted bids for the helicopter maker, with a speculated deal thought to reach the $10B area. A June 9 report from Reuters added Textron (TXT) to the list of bidders. Today's news -- though unconfirmed by either United or Lockheed -- comes ahead of second quarter earnings reports for both companies scheduled for Tuesday, July 21. PRICE ACTION: Shares of Lockheed Martin declined 0.22% to $201.18 at the close of trading on July 17, while those of United Technologies fell 0.45% to $110.76.